Insertion of time of commencement of the policy on a particular date is perfectly in accordance with law

UNITED INDIA INSURANCE COMPANY VS PEMA RAM AND ORS. 
ON 31 JANUARY, 1997
RAJASTHAN HIGH COURT

HELD THAT

The insertion of time of commencement of the policy on a particular date is perfectly in accordance with law and it does not contravene any provisions either of the Motor Vehicles Act or the Insurance Act.,1938.

BRIEF FACTS

1. On 28:3.1988, at about 9.00AM, Mst. Manthari was proceeding towards SDOT Road and when she reached near the shop of Makaram Mali, she was fatally hit from behind by Tractor No. RNJ 7154 which was being, driven rashly and negligently by the driver Shaft Mohd, who was working under the employment of respondent No. 2 Pokarram. 

2. She was taken to the Hospital in a precarious condition and there she succumbed to her injuries.

3. Claimant Pemaram, who is the son of Mst. Manthari, filed a Claim Petition under Section 410-A of the Act and claimed compensation to the tune of Rs. 1,16,000/-. 

4. The claim petition was contested by appellant Insurance Company and respondent No. 2 Pokarram, the owner of the Tractor. The respondent No. 2 Pokarram admitted that he was the owner of the vehicle and respondents No. 3 Shafi Mohd. was the driver of the Tractor and he was in his employment at the relevant time. However, he denied that the driver drove the above vehicle rashly and negligently. It was alleged by him that Mst. Manthari was mentally derailed on account of her illness and she herself was involved in the accident which could not have been avoided by the Driver even by using the best of his skill. 

5. The appellant Insurance Company also denied the accident and the death of Mst. Manthari for want of knowledge. The claim was specifically resisted on the ground that at the time of the accident, the above vehicle was not insured with the appellant and no valid and legal insurance policy was issued to the owner of the vehicle before the accident took place.

6. On the basis of the pleadings of the parties, the learned Tribunal framed the following Issues, which when translated into English, read as under:

i) Whether non-claimant No. 2 hit Mst. Manthari who was going near the shop of Makaram Mali on 28.3.1988 at 9.00 AM from her behind by driving the Tractor No. RNJ 7154 rashly and negligently, as a result of which, Mst. Manthari sustained head injuries to which she succumbed on the same day?

ii) Whether the claimant is entitled to get compensation and if so, to what extent?

iii)  Whether the above vehicle which was insured with non-claimant No. 3 on 28.3.1988 at 2.15 P.M. was not duly insured at the time of the accident, which occurred on 28.3.1988 at 9.00 AM?

iv) Whether non-claimant No. 1 was the real owner of the vehicle and whether non-claimant No. 2 possessed a valid driving licence at the relevant time?

v) Whether deceased Manthari herself hit the vehicle rashly and negligently, as a result of her mental imbalance and what would be its effect on the claim petition?

7. The claimant examined P.W.I Dr. U.R. Salechha, P.W. 2 Mukanaram and P.W. 3 Hansraj. The non-claimants did not produce any rebuttal evidence. However, after hearing the counsel appearing for the parties and after appreciating the facts and circumstances of the Case as also the evidence on record, the learned Tribunal held that respondent No. 2 Shafi. Mohd was responsible for causing the death of Mst. Manthari by hitting the tractor from her behind, which he drove rashly and negligently. The learned Tribunal awarded a sum of Rs. 30,000/- as compensation to the claimant Pemaram. The above Award was passed against the owner of the Vehicle as well as the Insurance Company jointly and severally.

8. Aggrieved by the above Award passed by the learned Tribunal, the appellant Insurance Company has preferred this appeal.

THE HON'BLE HIGH COURT HELD THAT

9.  The learned Counsel for insurance company has further contended that while taking policy of the vehicle, the owner did not disclose the material fact about accident and this non-disclosure of the material fact about the accident amounts to a fraud on the Insurance Company and, therefore, the appellant Insurance Company is not liable to pay the amount of compensation to the claimant.

10. The learned Counsel also submitted that on account of the non-disclosure of the material fact regarding this accident, the insurance policy obtained by the owner of the vehicle was void.

11. In another case, i.e. United India Insurance Company v. Kalawathi, Kerala High Court held that when the policy was issued on 7.4.84 at 9.30 AM, the Insurance Company was not liable as the accident occurred at 6.30 AM. in Gangdham's case (supra), it was held that the non-disclosure of the material fact of accident amounts to fraud on the Insurance Company. It was, therefore, held that the Insurance Company was not liable to pay the compensation amount.

12. When a policy is issued to the owner of the vehicle, there is a contractual obligations between the two parties, it is true that the cover note does not contain any column regarding the time of commencement of the insurance policy. However, If the Insurance Company mentions the time of issuing the cover note of the policy, I am of considered opinion that it is not in violation of any provision of the Motor Vehicles Act or the Insurance Act because it is a matter of contract and contracting parties can agree for the commencement of the policy from a specified time of a particular date. It is a matter of common knowledge that unscrupulous vehicle owners, in order to ward off their liability arising out of the accident try to obtain the insurance policy after the occurrence of the accident and If the policy only states the date, the liability of the insurer commences from previous mid night and thereby such unscrupulous owners of the vehicles cheat the Insurance Company by obtaining insurance policy even after the accident and will succeed in repudiating the liability on the basis of such a policy.

13. The Insurance Company faced with this situation, took precautions to issue the policies by specifying the time and date when the policy is issued on a particular date in order to frustrate the owners of the vehicles who rushed for insurance soon after the accident is occurred and takes policies so as to cover the risk arising out of the, accident which had taken place earlier. 

Thus, the insertion of time of commencement of the policy on a particular date is perfectly in accordance with law and it does not contravene any provisions either of the Motor Vehicles Act or the Insurance Act.,1938.